First, let me say that I don't currently have a position in RIMM. However, I intend to short it soon, I'm just now trying to pick an entry point.
Why? I am in Washington D.C. - perhaps the most important city/market for RIMM. The Blackberry was once considered a cool status symbol here. Now almost every government employee I know wants to dump their blackberry in favor of "bring your own device" policies. There is an internal message board/suggestion box with a thread entitled "Blackberry - Abandon Ship." I would say there are 8 people who want to bail out for every 2 who want to keep it. In my opinon, the USG keeps the blackberry out of pure burueacratic inertia only. The devices we get are typically old. Mine, a 9700 was released in 2009. It works well for email and calls. The broswer is a disaster - there are very few websites it works with.
The new BB10, might well be a fantastic product. However, any government employees that do get it, will certainly be prevented from downloading any apps for network security purposes. If you are a RIMM long, do you feel comfortable knowing that any day - albeit likely years away, the US government will drop the blackberry? Honestly, I'm surprised that the "Buy America Act" proponents haven't forced a change already.
I'll try to keep an open mind - can anyone convince me why I shouldn't short RIMM?
Sentiment: Strong Sell
Shorts went down by 5% from 2 weeks ago, dont bet against the markets, u will burn yourslef. this this is going straigh up at least until launch. then depending on sales of the new device, the direction will be known. up if the device is selling well and down if there is no demand for the new product. but until then, it is only up IMO
Sentiment: Strong Buy
Just thought I'd come back and thank the longs on the board for convincing me not to short a week ago. I would have taken at least a 15% haircut.
Also, it seems that Immigrations and Customs are in fact now having a second look at Blackberry. Kind of mutes my original message. Good luck to all!
"The new BB10, might well be a fantastic product. However, any government employees that do get it, will certainly be prevented from downloading any apps for network security purposes."
You need to read up on BB10 Balance. It seperates the phone into corporate (secure) and personal(download any questionable app you want). Personal side of the phone does not impact the secure corporate side. So your concern falls flat.
If you are going to bash BB10 you might as well be framiliar with the product.
Valid point, I don't yet know enough about the product. But I do know government policy. Our government IT guys are so paranoid that I doubt if any personal apps would be allowed regardless. It will be considered a government device and standard practice for any government computer, phone, etc is limited personal use, with downloading executable files prohibited. RIMM should lobby the goverment for an exception if there can be a firewall between the personal / office use sides. There would still be an issue of working out payment issues for downloaded apps. I just don't see the gov bureaucrats being flexible on this.
Of course, this all really doesn't matter much in the grand scheme of things - the perception among users is that the blackberry is on the way out. Perception can be wrong, of course. The government is unlikely to abandon RIMM before the BB10 is out. Perhaps I'll just be patient on my short selling plans. I'll revisit this in the springtime.
Thanks for the good discussion guys!
This is why they have been approved with Fips certification before launch by US governement. who ever wants to switch will be able to do so with the new device comming in two month time.
Sentiment: Strong Buy
Great Post Baxter...When you say Government employees will be prevented fro downloading APPS on new BB10 wouldn't that also hold true to a Droid or Iphone if they were able to switch over. RIMM is a niche player and obviously when you have revenues of 10 billion in a bad year...they don't solely rely on Gov't business....I don't agree that the need to run from RIMM like many already have will be as necessary once BB10 gains traction. At that point you will have wanted to cover your Short. The Real estate alone in Canada plus cash plus patents without any growth at all still leaves this stock trading under it's true value. Short the stock at 32 maybe not at 12 ....
Yes, it is true that gov't employees also wouldn't be able to download apps regardless of the phone being used. I didn't say the desire of employees to switch was necessarily rational. The BB10 review I watched this morning shows that the new BB has an interesting wall between official / private use. I wonder if users would someday be able to download apps on a private partition and use their own funds to pay for the apps? That would be valuable. I for one refuse to carry two phones - so BB is it for me since that's what the USG has issued. I do feel a bit "left out" and sometimes frustrated by the browser.
Because taxpayers are paying for them and security may not be the average government employee's determining factor for wanting a Blackberry vs. a smartphone. Also I have worked with a couple of government agencies and corporations and mostly they want what the other person gets even though they have no real use for it. They are like kinda in a candy store.
RIMM is global. And, they have a new hot phone getting launched. So what if the US Government doesn't work with them. RIMM is going to be adding way more customers outside of the US. There's 7 billion people on this planet. I think there's plenty of business to go around!
I sense your sarcasm. Obviously you don't agree. But I imagine that you would agree that this company's future is dependant on the BB10. Can you point me to any good articles on why the 10 will revive this company? I don't hate RIMM. I'm just looking at this in a cool and un-emotional way - since I don't have a position. The competition in this industry is brutal. Nokia is in trouble, Apple stock is falling despite it's success, and Samsung is everywhere. What is your rationale for a bright future?